Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. If you continue browsing the site, you agree to the use of cookies on this website. See our User Agreement and Privacy Policy.

Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. If you continue browsing the site, you agree to the use of cookies on this website. See our Privacy Policy and User Agreement for details.

A review of urban Community Land Trusts in England

This paper, produced in 2011 as part of Young Foundation programme Future Communities, reviews the experience of urban community land trusts in England. It identifies practical lessons about how to establish a community land trust and investigates common issues and obstacles to success.

The paper explores the potential for community land trusts to be established in key neighbourhoods in the city as a vehicle for on-going community regeneration.

A review of urban Community Land Trusts in England

1.
A review of urban CommunityLand Trusts in EnglandLessons and practical adviceDecember 2011

2.
This paper reviews the experience of urban community land trusts inEngland. It identifies practical lessons about how to establish acommunity land trust and investigates common issues and obstacles tosuccess.This work was produced as part of the Young Foundation’sFuture Communities programme to explore the potential forcommunity land trusts to be established in key neighbourhoods in thecity as a vehicle for on-going community regeneration.

3.
This paper reviews:1. National policy on asset transfer2. The benefits of asset based community development andcommunity asset ownership3. Development Trusts or Community Land Trusts as avehicle for asset transfer4. Current examples of urban Community Land Trusts inEngland5. Case studies: Shoreditch, Headingley, Moseley6. Managing the risks of a CLT7. Practical lessons for communities

4.
Questions for the review1. What can be learnt from the experience of planned and existing development trusts and community land trusts in the UK and internationally?2. What role can development trusts and land trusts play in building community social capital?3. What are the developments costs incurred in setting up a community land trust, and the timescales involved?

6.
National policy context1. Decentralisation & Localism Bill – focus on enabling community assettransfer, promoting community ‘right to build’, ‘right to reclaimland’, and ‘right to challenge’ to take over community facilities2. Local government interest in community development trusts andcommunity land trusts as succession vehicles for public regenerationpartnerships3. Interest in social and community enterprise as route to sustainableregeneration and economic development4. Evidence to show local third sector and community capacity andinfluence over local decision-making, and services strengthenedthrough community asset transfer5. Recognised importance of social capital in building cohesive,empowered communities

7.
Community Asset Transfer:Quirk ReviewThree firm conclusions:1. Transfer must realise social or community benefits withoutrisks to wider public concerns, or community interests becomingoverly burdened by operational concerns2. Benefits of community ownership can outweigh risks andopportunity costs in certain circumstances, and there are nosubstantive obstacles or impediments to transfer3. Risks exist, but can be minimised and managed. Requirespolitical will, managerial imagination and a more business-focused approach by public and voluntary sectors

10.
What is Asset Based CommunityDevelopment (ABCD)?• Strategic approach & method to community-driven development andregeneration• Pioneered in North America and internationally in developingcountries• Builds on community/VCS strengths (physical assets, skills andcapabilities) - not negatives as common in traditional regeneration• In UK ABCD has focussed on physical assets put to use throughcommunity ownership and enterprise via a Community AnchorOrganisation (CAO)

11.
The benefits of asset ownershipto the community anchor organisationJourney towards asset ownership can bring sense of achievement andconfidenceSuccessful transfer gives the organisation status, recognition, power andsupport within the community and among local stakeholdersTransfer process leads to qualitative transformation of organisation’sculture and management capacityOwnership of capital asset provides basis for social enterprise and tradingactivity: generating surpluses to finance new activities and further growth;helping lever in additional assets; providing collateral for loan finance

12.
Benefits of community assetownership to local stakeholdersLocal stakeholders have a new partner to work withCommunity partner to support local authority and service providers inservice design and deliveryWork on a variety of projects on terms that don’t involve maximisingshareholder profitBase for providing joint or complementary services that are closer, moreresponsive and accountable, and tailored to community needsThird sector development body able to access funds inaccessible to thepublic sector and achieve greater investment into the localityCommunity benefits can lead to reduction in pressures on public services:health, welfare support, criminal justice system

13.
Benefits of community assetownership to the wider communityDirect and indirect benefits: communities have greater influenceEnable communities to solve their own problems through self-help,community action and social enterpriseWealth creation activities brings income into the community (e.g.employment opportunities for young people). Wealth created is retainedand recycled within the community: new projects and further benefits‘Multiplier effect’ brings wider range of benefits: boosting business viability,restoring land values and attracting new investmentPromoting community cohesion through bringing people from differentbackgrounds building bridging and bonding social capital: using latent skillsand talentsGenerate confidence, hope, civic pride: significant psychological boost

16.
Choices and options for a communityanchor organisation• What type of Community Anchor Organisation (CAO)?• Community development trust or community land trust?• What level of community and stakeholder involvement?• What legal form to constitute as: CLG, ISP, CIC?

17.
Legal vehicles for a CAO• Incorporation is essential if CAO is to own assets• No correct legal vehicle, and more than one possibility• Legal form provides operating framework for the organisation: how it is set up, managed and governed• Form follows function: legal arrangements dependent on objectives of the organisation, and mechanisms to further community and other stakeholder involvement in its governance and decision making processes• Organisational form: reflects ownership and power structures, ultimately determining who has final control over direction of its resources and use of its assets• Legal form needs to protect not just the social mission but the assets of the CAO

18.
Legal optionsLegal Form Suitable ReasonAssociation No UnincorporatedTrust No UnincorporatedLimited Liability Partnership No Profit-distributing vehicleCompany Limited by Shares No Uncommon in third sectorCompany Limited by Guarantee Yes Common usageIndustrial and Provident Society Yes Common usage(Community Benefit Society)Industrial and Provident Society No Profit/dividend distributing(co-operative)Community Interest Company Yes Specific third sector vehicleCharitable Incorporated Organisation ? New legal vehicle

19.
Key features Company Limited by Industrial and Provident Community Interest Guarantee Society (Ben Com) CompanyLimited Liability Yes Yes YesConstitution Mem and Arts Registered Rules Mem and ArtsRegulator Companies House FSA Companies HouseOrganisational structure Two-tier or one-tier Two-tier or one-tier Two-tier or one-tierGoverning body Board of Directors Management Committee Board of DirectorsMembership Open or discretionary Open or discretionary Open or discretionaryStakeholder i Possible Possible PossibleVoting Usually OMOV Usually OMOV Usually OMOVCharitable Can be Can be NoAsset Lock Via charitable status Yes YesSpecial Features Flexible structure for Membership via Shares Community Interest third sector; (1-20k) Statement Community Bond Issue Community Share Issue

20.
What are Development Trusts?• No legal definition for development trusts (DTs)• No single organisational / constitutional form: - Company Limited by Guarantee (CLG) - Industrial and Provident Society (IPS) - Community Interest Companies (CIC)• Can have charitable status, and trading subsidiaries• Members can be drawn from local community, local stakeholders and partners, such as the Local Authority• Can arise from grass-roots community campaigns or state-funded partnerships and agencies• Membership open to all – or closed and selective

21.
Third sector, market-orientated vehicles providing services to local people Third Four underlying principles: sector • Engaged in the economic, environmental and socialPrivate regeneration of a defined areasector • Independent, aiming for self- Community Development sufficiency and not for private enterprise Trusts profit • Community-based, owned and managed Social • Actively involved in enterprise partnerships between the community, voluntary, privateSource: DTA 2010 and public sector Public sector

22.
Development Trusts in 2010• 492 DTs in the UK• Generating £272m combined income; £157m earned• £565m assets in community ownership• 43% urban and suburban; 38% rural; 19% mixed• 90% CLGs, 4% CICs, 6% IPS or unincorporated• Over 70% registered charities• 55% have 5 or fewer staff• Over 50% have more than 10 volunteers• One third of DTs in areas with 10% BME population• One in ten DTs in areas with 50%+ BME population (Boards reflect this demographic)

24.
DTs: top down or bottom up?Bottom up community-led campaigns:• against something: loss of local facilities• in favour of something: saving local iconic building, improving local economy and environment.Top down:• Succession vehicles for publicly-funded interventions: Housing Action Trusts, New Deal for Communities• Formalisation of partnership and stakeholder arrangements: Local Strategic PartnershipSocial entrepreneurial activity:• Driven by small core of entrepreneurs

25.
What are community land trusts (CLTs)?Statutory definition:Housing and Regeneration Act 2008, Part 2, Chapter 1, Clause 79:A Community Land Trust is a corporate body which:1) is established for the express purpose of furthering the social, economic and environmental interests of a local community by acquiring and managing land and other assets in order - to provide a benefit to the local community, to ensure that the assets are not sold or developed except in a manner which the trusts members think benefits the local community2) is established under arrangements which are expressly designed to ensure that:• any profits from its activities will be used to benefit the local community (otherwise than by being paid directly to members)• individuals who live or work in the specified area have the opportunity to become members of the trust (whether or not others can also become members)• the members of a trust control it.

26.
What does this mean?• Mechanism for landowners to give land to meet local housing and other needs• Legal definition assures landowner that no-one is going to get a windfall (particularly relevant if land is at unrestricted market use value) and land values are retained for the community• Mechanism for positively engaging communities in ‘place-shaping’: the development of their locality, and maximising the development of land and assets• Unlike RSLs and some DTs, membership should be open and not restricted

27.
CLTs = genuine local democracy• Individuals who live or work in the area must be able to become members• Members must control the organisation• But: no regulator of CLT brand – reliant on legal interpretation of membership requirement• Membership-based place-shaping tool and way of bringing community together to drive area-based change• Genuine model of community empowerment: neighbourhood governance, service delivery and provision of facilities• Through ownership of land and assets captures benefits of rising land values for the whole community and recycles wealth• Puts community in the driving seat over development opportunities

28.
Control of a CLT“Classic” CLT model (USA) – tripartite Board structure Tenants of People CLT living housing / locally property Stakeholders Third + public sector members

29.
CLTs – primarily rural model• CLTs largely a rural phenomenon: now a ‘social movement’• Not only rural ‘exception’ sites• CLT National Demonstration project and CLT Fund• Lindesfarne CLT first to access HCA grant funding: although achieved at huge cost• Still immense bureaucratic and financial obstacles but not insurmountable• Intermediate housing provision is key driver but variety of uses: farms, workplaces, community facilities• Builds on track record of community ownership: community halls, pubs, shops, etc• Most successful CLTs in remoter, more peripheral areas

30.
The theory:To CLT or not to CLT? CAO Organisational Legal form type • Company Limited by Aspiration for Guarantee (CLG) membership Yes CLT • Industrial and Provident to be open to or DT Society (IPS) • Community Interest all living and Company (CIC) working locally, and • Company Limited by democraticall Guarantee (CLG) y controlled No DT • Industrial and Provident Society (IPS) by members? • Community Interest Company (CIC)

31.
The practice: a democratic deficit? Set up a vehicle Social to meet vision/ Apply to join entrepreneurs / objectives ‘CLT’ Members of community local activists with a “CLT” community / ‘vision’ / local community Vehicle controlled ‘CLT’ launches organisations objectives by founders community Bond or Share issue Initiation Development Operational TIME: CLT develops democratic features as it evolves

32.
Options for deciding on levels ofcommunity and stakeholderinvolvement

33.
Membership-based democracy:Board elected by and from members Board elected Experts Join from membership Can co-optPeople CAOliving and CAO CAOworking in membership Boardlocal area Can co-opt Stakeholders

34.
Neighbourhood democracy: Boardelected by and from local residents Experts Neighbourhood ballot for Board membership Co-optsPeople livingand working CAOin local area Board Board membership elected from citizenry Appointed Co-opts Stakeholders

36.
Oligarchy: Members of the CAO andBoard are the same Experts CAO constitution Entry Co-opts to Board defines its CAO members, Members e.g. initial function as Application by founders the Board prospective members Selects New Board Leaving the Board Exit members means leaving CAO membership

41.
Status of English urban CLT projectsCashes Green Final planning permission submitted.Bolton Model ‘on the shelf’. Unlikely to be used.London Citizens CLT CLT formed. Tender process underway.Digbeth Ecohub Site now unavailable. Project on hold until new site is found.Headingley Homes CLT DT operating as CLT and letting small portfolio of homes. Looking to acquire further properties and establish autonomous CLT.Shoreditch Property Equity Model developed and abandoned due toTrust political decision not to adopt.Portsmouth HCA model akin to management company.Brixton Green Working proposals outlined. Selling shares to local stakeholders to support development.

42.
English urban CLTs – state of play• CLT projects scattered across urban England at various stages of development• No significant breakthrough made as yet, although some projects at key stages of development• Tension between democratic, membership based models open to the community and social entrepreneurial-driven and paternalistic projects controlling activity• Tension between representative and participative democracy• Changing investment structures: need for range of investment partners and CLT hosting site-wide management function

43.
Rationale and objectives• Provision of affordable housing: social rented, sub-market rented, shared-equity, MHOT• Provision of mixed use facilities• Regeneration of areas of significant deprivation and poor housing• Community empowerment• Agent to deliver Local Strategic Partnership/Local Area Agreement priorities• Extended functions: social and community enterprise; space for commercial enterprise to maximise revenue streams; employment objectives: links with schools and CYP into work

45.
CLTs building social capital?• Local people see CLT as means for engagement and getting involved: self-help and mutuality, not charity• Works well with areas of high social capital among residents• Not by giving people the opportunity to acquire new skills but by recognising skills people already have: formalisation of experience• Community capacity building is vital• Sensitivity needed in areas with community tensions

46.
Problems encountered• Limited funding for CLT projects• Lack of political support• Numerous community stakeholders• Inability to ground in LSP priorities• Authorities reluctant to actually transfer assets• CLT seen as competitor to traditional social housing• CLT seen as means to prevent local development• Community Asset Transfer seen as problematic due to uncertainty over political affiliation of local community groups• Market crash• Time consuming for volunteers

47.
Leaseholder Enfranchisement• Leaseholder Enfranchisement under the 1967 Leasehold Reform Act stalled development of CLTs where not a rural ‘exception’ site• Leaseholders who own a share of their home on land owned and provided by a CLT have the right to buy the freehold of the land • In theory prevents creation of permanently affordable leasehold• Further legislation needed to prevent enfranchisement• In meantime: − Mutual Home Ownership Trust model of co-operative housing − Equity mortgage split between individual and CLT with statutory right of redemption − Deed of Trust

48.
Factors for success• Anchored in the local community• Right governance and strong leadership• Solid Business Plan from day 1• Commitment of time, enthusiasm• Basic skills of members• Access to excellent financial advice/ pro-bono work by local professionals• Sympathetic local authority• Geared to meet LSP priorities and LAA outcomes• Supportive partners, e.g. RSLs

50.
A tale of three TrustsShoreditch DT, LondonNew Deal for Communities succession vehicleExemplar approach to asset-based developmentHeadingley Development Trust, LeedsMembership-based DT also functioning as a CLT800 members makes it one of the largest DTsMoseley Community Development Trust, BirminghamSteering group drawn from neighbourhood associations

51.
Shoreditch Trust• Not just another regeneration vehicle or municipal service provision: need other ways to alleviate poverty and regenerate people• Asset ownership as means for community to have power: £22m• Use social enterprise to generate income and address local issues• Partnership-led: community is an equal partner with a range of others in service delivery and shaping strategic direction• 12 members of board originally elected from community: 38% turnout (as well as Borough Commander and PCT)• Now Board of 7 local people and youth rep voted by schools and 5 co-optees to address skills gaps (including LBH). Police and PCT involvement through projects

53.
Headingley Development Trust andHeadingly Homes CLT• Resident-led and member controlled vehicle set up to respond to local social stress, rebalance local economy and housing market• Social enterprise as means to provide local services and facilities• Asset-ownership as means for community to shape development• CLT as means to provide family homes• Community share issue raised £100,000 to purchase Natural Food Store; now run as a co-operative• Raised another £100,000 by share issue towards HEART (Headingley Enterprise and Arts Centre) project; former primary school acquired, refurbished, and recently opened for operation

54.
Headingley Development Trust andHeadingly Homes CLT (cont.)• Industrial and Provident Society for Community Benefit• Community-owned, membership open to organisations and individuals aged 16 and over (no resident qualification)• Board elected by membership at AGM by one member, one vote• Completed a Neighbourhood Design Statement for the area, commissioned by the Council• Other projects include a Farmers’ Market, a community orchard and Café Scientific

55.
Moseley CDT• CLG and Registered Charity• Origins in Moseley Society (est. 1979) and Moseley Forum (est. 1998)• CDT seen as suitable vehicle to tackle problems faced in the neighbourhood: inflated property prices; expensive housing; employment problems for young people• Steering Group to establish CDT drawn from MS and MNF, involving local experts• Three years funding for a Development Officer (2000)• Steering Group constituted as Board of Directors and Trustees for CDT in 2001

59.
Risks• This section summarises the various risks associated with establishing a community anchor organisation as a vehicle for asset transfer, and practical approaches to mitigate these risks.• This list is not exhaustive but identifies key issues emerging from the review• Community asset transfer is high risk but can be managed with good governance and business planning and systematic risk management• Key question for local authority is ‘appetite for risk’?

60.
RISK WHY WHAT TO DOCommunity • Organisation and • Furtherempowerment proposals may not consideration ofobjectives are vague have buy in from local objectives for asset(s)and weak community • Undertake community needs survey • Partnership working with other organisationsLack of skills and • Unrealistic • Organisationalcapacity to manage expectations development planthe asset • Time, effort and • Ongoing access to money wasted expertise and advice • Asset(s) potential • Viable long-term wasted business plan

62.
RISK WHY WHAT TO DOLack of knowledge of • Costs are under- • Surveys on conditionthe asset(s) estimated of assets • Asset use is • Employing full-time undecided project manager • Projects can be jeopardisedState aid rules prevent • Inability to process • Falls within areas ofpublic financial CAT ‘permitted support’support • Time delays • Does not affect trade between member states

63.
RISK WHY WHAT TO DOAsset not used in the • Misappropriation of • ‘Expectationspublic interest / funds document’ developedaccess not inclusive / • Asset under-used between transferringtaken over by • Local resentment and communityunrepresentative and risk to community organisationminority cohesion • Different interests • Restricted access and communities on causing other groups Board to want own asset • Local authority • Competition for presence on Board control of asset • Community among groups organisation is genuinely open and multi-purpose

65.
RISK WHY WHAT TO DOLimited potential for • Asset may not • Access to specialistenterprise generate enough business supportdevelopment based revenue to be • Assistance onon asset / in the area financially viable business planning and • Grant funding may marketing not be available • Staged transfer of • Service contracts asset(s) may not be agreed • Consideration of which LSP partners are integral to viability and ensure procurement of services

66.
RISK WHY WHAT TO DOReliance by receiving • individuals • Managementorganisation on small overburdened and committee givennumber of volunteers unable to maintain overall control and effort and interest work through • lack of volunteers collective may threaten project responsibility when current • Rotation of volunteers move on committee members • may not be possible • Advice on succession to keep building fully planning open, limiting its use • LA-wide network of trustees • Work with other CAOs

67.
RISK WHY WHAT TO DOUse does not fit with • Ability of LA/LSP to • Expectationswider strategic aims implement SCS and Document agreedof LA and LSP and meet LAA targets between LA/publicpublic sector • Community sector and communitystakeholders organisation unable to organisation form stable • Ensuring through partnership with LA service level agreements that changing LA priorities do not adversely impact delivery of service by community organisation • Monitor use of building

69.
Questions for the review 1. What can be learnt from the experience of planned and existing development trusts and land trusts in the UK and internationally? 2. What role can development trusts and land trusts play in building community social capital? 3. What are the developments costs incurred in setting up a community land trust, and the timescales involved?

70.
Findings: what English CLTs woulddo differently• Spend more time fundraising• 12-24 months capacity building prior to setting up organisation in the community• Address negatives and objections at the very beginning• Begin with long-term social enterprise model and use of the site

71.
Findings: timing• Quirk Demonstration programme indicates 5 year timeframe for establishing a community anchor organisation for asset transfer• London Citizens CLT: 7 years total campaigning• Headingly Homes: created DT in 2005, functioning as CLT and leasing homes in 2008• Cashes Green: original Feasibility Study in 2004, final planning permission submitted in 2011

72.
Findings: development costs• Paid organiser / officer time is crucial, circa £40,000 perannum• From £2,500 for initial business planning, to £100-250kneeded for development of proposal• Considerable volunteer time also required• Plus funding for site development

73.
Ten practical lessons1. Bureaucratic and financial obstacles to successfullyestablishing a CLT are significant but not insurmountable2. Quirk Demonstration programme indicates 5-yeartimeframe for establishing a community anchororganisation for asset transfer3. Public sector support, political will and communityinterest, strong business planning and social enterpriseelement to model are crucial conditions for success

74.
Ten practical lessons4. These factors need to be in place early on5. Both public-sector driven (e.g. Shoreditch) andcommunity driven (e.g. Headingley) approaches can workeffectively6. To date, rural CLTs have been most successful7. Issues about defining community and stakeholders can bemore complex in densely populated / less cohesive urbanareas8. Tension between open membership principle and coregroup of social entrepreneurs

75.
Ten practical lessons9. Sensitivity to community tensions is important,especially in areas with a history of social, ethnic, racialtension between residents10. Tension also exists between principle of openmembership for CLTs and core group of socialentrepreneurs often needed to get CLT started

76.
This work was carried out between 2010-2011 by DanielCrowe, Saffron Woodcraft and Douglas Cochrane.For more information contact:saffron.woodcraft@social-life.co